Back-End Standards Support Front-End Omnichannel Success

March 14, 2014

By Melanie Nuce, VP. Apparel/General Merchandise, GS1 US
On a Saturday late in December, days away from Christmas, Saturday Night Live’s resident Weekend Update host offered an insightful quip about the state of retail. Toys “R” Us announced this week that its stores will remain open for 87 straight hours leading up to Christmas. Not to be outdone, the Internet announced that it will be open all the time, always and forever,” he read, followed by roars of laughter from the live audience.
Reflective of what is being dubbed as the “post omnichannel” retail industry, the joke strikes a chord particularly with those retail supply chain executives and managers looking for ways to make serious strides in the channel-less, increasingly customer-centric marketplace in 2014. The new reality is shopping is truly no longer confined by space and time.
Omnichannel success depends on the alignment of back-end operations and consumer-facing services. GS1 standards provide the structure to achieve this alignment. Analysts from Retail Systems Research say we are at a critical “reset” moment. The brands and retailers who reorient their supply chain operations based upon a foundation of scalable, repeatable processes and consistent data will outlive the traditionalists, who prefer proprietary and outdated data solutions. Retail supply chain operations that embrace, not ignore, customer centricity should pay attention to four key strategies:
1. Inventory visibility: Supply chain visibility and inventory accuracy are the foundational requirements for effective omnichannel operations. What a retailer’s system says is in stock, needs to actually be in stock. Item Level RFID tagging is a critical enabler for this strategic lever, creating efficiencies internally to help ultimately give the consumer what she wants when she wants it. Retailers that have already deployed pilot programs have found RFID technology is significantly faster than counting individual item bar codes, enabling frequent inventory counts and accuracy that has risen from an average of 63% to 95%, according to University of Arkansas RFID Research Center studies.
2. Web-ready products: Significant investments of time and money are being spent on gathering product attributes and images to list items on e-commerce sites. Optimizing “speed-to-web” in today’s digital environment is ripe with opportunity for improvement. Not all key attributes and images are standardized, and while some of the data is supplied by vendors, much of it is still being gathered by the retailer. GS1 Standards provide the foundation for identifying, capturing and sharing product data, and there is a tremendous opportunity for industry to continue to collaborate together to define additional product attributes and common data-sharing models.
3. Attributed customer: Perhaps the piece of the omnichannel puzzle that represents the greatest opportunity to create a competitive advantage is the ability to understand the customer in ways that were not possible prior to the emergence of the online world. According to a 2013 report from Retail Systems Research, creating a consistent customer experience remains the most valued capability for retailers, but 54% of retailers say their biggest inhibitor is that they do not have a single view of the customer across channels. Listening to what the consumer shares through social data, product reviews and purchase history can provide valuable insight for continually enhancing future strategies.
4. Fulfillment strategy: A 2013 Accenture report found 81% of survey respondents said it is important for a retailer to enable them to pick up or arrange for delivery of their purchase regardless of how they paid for the item. Consider all the purchasing options a consumer has and the immediacy of how product can get to her home. A variety of fulfillment options — in-store, web-store, direct-to-consumer — need to be examined and deployed based on business goals and supply chain capabilities. Identifying the right mix for an effective fulfillment strategy will involve the examination of essential processes and infrastructure, including systems, logistics, staff training, order preparation and product presentation that can help make the sale happen.
Throughout these four strategies, brand owners and retailers place an emphasis the GS1 system of standards, which make it possible for companies to speak the same language when identifying, capturing, and sharing information about products, business locations and more – across all channels and throughout all of the stops a product makes from source to consumer.
Supply chain standards have saved trading partners billions of dollars through improvements in data management, business communications, and analytics, allowing for widespread and repeatable efficiencies. Proprietary product identifiers that were used in the past for internal business purposes are, by definition, usually non-unique and incompatible with other systems, creating unnecessary costs and complications for business processes between trading partners.
Ultimately, assuring customers a unified and coordinated experience will be a retailer’s strongest asset in how they adapt to the “always on, always open” marketplace.

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